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Federal investigators are asking questions about the development of an Illinois power plant that
serves Ohio consumers.

Peabody Energy disclosed the federal probe this week in its annual report. The company said the
Securities and Exchange Commission has asked for documents related to Prairie State Energy
Campus.

“Based on current information, the company believes that such other pending or threatened
proceedings are likely to be resolved without a material adverse effect on its financial condition,
results of operations or cash flows,” Peabody said.

In an email, a spokeswoman said: “We look forward to sharing information on what is a highly
successful project.”

Prairie State, located in southern Illinois, is partially owned by American Municipal Power of
Columbus. The 1,600-megawatt, coal-fired plant has been hurt by cost overruns and mechanical
problems. The result is electricity that is more expensive than the market price.

Although Missouri-based Peabody initiated the project, it had sold almost all its interest to a
series of buyers by the time the plant began operating at full capacity last year. AMP owns 23
percent, which is more than any other owner.

AMP could not be reached for comment about the SEC investigation. The company helps city-owned
utilities manage their electricity systems. It has about 130 members in six states; 68 member
cities chose to invest in Prairie State, of which 60 are in Ohio. Among Ohio AMP members, Galion
bought shares in the plant, while Columbus and Westerville did not.

AMP’s leaders have continued to defend the decision to sell $1.7 billion worth of bonds to
invest in Prairie State, which they say is an essential part of a diverse energy portfolio.